Report summary: Incident: Kangsheng Co., Ltd. issued an announcement on the evening of September 5: Chen Hankang, the actual controller of the company, and Zhejiang Runcheng, a co-actor of the company, plan to reduce the company's shares by no more than 50 million shares through bulk transactions within six months from the date of the announcement, accounting for no more than 4.40% of the company's total share capital. The reason for the reduction is to supplement the working capital of Zhongzhi New Energy Vehicle Co., Ltd. After the implementation of this holdings reduction plan is completed, the total shares of the Company held by Chen Hankang and his co-actors are no less than 24.21% of the current total share capital, and he is still the largest shareholder of the company. Comment: The majority shareholders' holdings reduced their holdings to supplement working capital for Zhongzhi New Energy, guaranteed vehicle performance in 2016, and further raised injection expectations. In the company's strategic plan to “build a leader in new energy vehicles,” the positioning of Zhongzhi New Energy Vehicles is to expand the commercial vehicle, logistics vehicle, and special vehicle market while at the same time developing the characteristics of Zhongzhi New Energy Vehicles. Therefore, Zhongzhi New Energy occupies an unquestionable strategic position in the expansion map of Kangsheng Co., Ltd. Since the company hosted Zhongzhi NEV in April last year, the company has continuously integrated its resources, laid out the core component technology of wheel-side motors to seize the high ground for the future development of new energy vehicles, and joined hands with Guoxuan Hi-Tech to build production capacity to solidify a firm foundation for the volume of new energy vehicles in Zhongzhi New Energy. A number of measures have added bricks and tiles to Zhongzhi New Energy's strong foundation. This time, Kangsheng's actual controllers reduced their holdings to supplement the working capital of Zhongzhi New Energy. It is the company's move to send capital ammunition for the further integration of Zhongzhi New Energy. On the basis of guaranteeing the performance of vehicles in 2016, expectations for the injection of Zhongzhi New Energy have also been further strengthened. The medium- to long-term growth logic will not change, and the “buy” rating will be maintained. We continue to be optimistic about Kangsheng Co., Ltd.'s three major growth logics: expectations for new energy injection continue to strengthen in the short term; in the medium term, we are optimistic that the company relies on core component technology such as wheel-side motors to continue to expand in new energy vehicles; in the long term, we are optimistic that the company's introduction of the domestic passenger car parts market will open up a new round of growth space. At the same time, with the recent implementation of the new energy vehicle policy, the company will usher in a good layout opportunity. It is expected that the company's EPS for 16-18 will be 0.19/0.31/0.49 yuan, respectively. Maintaining a “buy” rating, and continue to be highly recommended! Risk warning. The company's business expansion in the NEV sector fell short of expectations.